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Today TaxMama® hears from Laura in the TaxQuips Forum, with a tough question. “In 2011 my Elderly client (78) pulled all the money out of a retirement account which his wife had set up for him some years back. My client learned about the account upon her passing and withdrew all the funds not knowing there would be tax implications.
The 1099R has the box checked (TAXABLE AMOUNT NOT DETERMINED with a DISTRIBUTION CODE 7). I am trying to figure out the client’s basis. The contact at the bank has no idea what I am talking about. What should I do? Is there anything I can do to reduce my client’s taxable income?”
